HUGO BOSS
Investor Meeting Presentation
Agenda
American strategy update
Financial strategy update Group medium-term strategy
Agenda
American strategy update
Financial strategy update Group medium-term strategy
Continued strong top and bottom line momentum 750 469 350 267 272 275 +19% 2015e 3,000 … 2011 2,059 2010 1,729 2009 +34% 1,562 2008 1,686 2007 1,632
EBITDA before special items Sales
Sales and EBITDA before special items
Successful execution of medium-term strategy STRIVING FOR OPERATIONAL EXCELLENCE STRENGTHENING OUR BRANDS EXPLOITING GLOBAL GROWTH OPPORTUNITIES MAXIMIZING CONSUMER FOCUS TO DRIVE RETAIL
Integration of BOSS Black and BOSS Selection elevates the core brand
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Strengthens the core brand’s market position in luxury clothing and sportswear■
Leverages BOSS growth potential across differentfashion segments from premium to luxury
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Maximizes the power and global recognition of the BOSS logoMade to Measure demonstrates unrivalled tailoring competence
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Modern technology and uncompromisingquality “handmade in Germany”
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Combines excellent craftsmanship,premium materials and tailor made service with efficient industrial
manufacturing
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Permanently offered in several Europeanflagship stores
HUGO brand the Group’s fashion spearhead
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Strong positioning as home ofavant-garde design
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Focus on clean, minimalistic looksaddressing the fashion-forward consumer
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Targeted expansion of stand-aloneretail presence
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Significant growth potential in underpenetrated marketsStrength in sportswear key competitive advantage
Sportswear elegance
Contemporary urban sportswear
Active sportswear
Collection Occasion to wear
Casual Friday Luxury Weekend Daywear Downtime Party Sporty lifestyle Performance
All brands ready to exploit potential of global sportswear market
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Offer the best price-value relationship in the premium segment■
Enhance clarity of product branding■
Firmly establish BOSS Orange as key premium lifestyle brand at wholesale■
Convince in leading edge technical innovation■
Strengthen distribution in golf performance accounts■
Maximize commercial potential of golf pro cooperations■
Strengthen product offering in luxury segment■
Sharpen DNA of ‘Sportswear Elegance’Clear womenswear strategy in place
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Offer excellent and reliable fit with favorable price-value ratio■
Grow modern clothing business based ontailoring expertise
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Maximize brand potential in leisurewear■
Grow shoes & accessories supplementing core apparel offering■
Introduce party capsules and eveningcollection
Clear womenswear strategy in place (cont.)
Communication
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Regular participation at New York Fashion Week■
Dedicated womenswear advertising campaignOrganization
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Separate organizational entity Distribution■
Increased exposure of BOSS womenswear in allUnprecedented fashion show presence in 2013
HUGO showcases collections in Berlin
Share of retail sales set to grow further
Wholesale Retail
Royalties
Sales by distribution channel
2005 3% 75% 22% 2010 3% 57% 40% 2011 2% 53% 45% 2015e 2% 43% 55%
…
Introduction of four season cycle has made HUGO BOSS a true retailer
December January February March April
June July August September October
Spring 2012 Summer 2012
Fall 2012
Introduction of four season cycle has made HUGO BOSS a true retailer (cont.) 12% 8% 40% 46% 11% 7% 37% 39% 2012 2011
Seasonal split of wholesale pre-order business
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Fresher merchandise offering■
Better adjustment to seasonal differences in consumer demand■
Immediate relevance at the point-of-sale■
Working capital advantagesDevelopment of collection complexity
-7%
2012e 2011
Brand module architecture supports more flexible merchandise offering
“S” Module
“XL” Module
Core range has demonstrated superior performance
Share of core range
0 10 20 30 40 50 60 70 0 5 10 15 20 25 30 35 40 Fall 2012 70% 33% Spring 2012 67% 28% Fall 2011 45% 15%
Units sold per style (Fall 2012)
x 4.7
Core range Non core range
Core range style/color (s/c) as % of total collection s/c Value share of core range
Heat mapping technology newest in-store design innovation
Purpose Benefits
Enhances understanding of consumer behavior to drive operational performance
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Generates traffic mapshowing the actual footpath of consumers in the store over the course of the day
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Overlay withtransactional data offers insights into correlation between traffic and sales per product category
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Optimizes product and campaign positioning■
Supports optimization of space utilization and staff allocation■
Assesses visualmerchandising effectiveness
Window Window
Suit wall Shirt wall Bodywear Sh o e s / Acce s s Tie table Belt Knitwear Outerwear Kn it w e a r Entrance
Systematic retail management ensures highest customer service standards Customer Service Training Mystery Shopping Store Operations Manual Incentives sets standards
measures and monitors
Retail training activities stepped up significantly
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Roll-out of standardized multi-language online training solution■
Focus on systematic strengthening of productcompetence, selling skills, and store management capabilities
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Supplemented by targeted face-to-facetraining sessions YTD 2012 29,500 2011 22,100 2010 15,800 2009 14,100
CRM @ HUGO BOSS - Sharpen the end consumer focus
Understand our customers
Win new customers
Increase customer loyalty
Increase frequency of visits
Increase sales / turnover Customer data collection & quality Marketing planning Analysis & segmentation
Worldwide HUGO BOSS CRM platform (IT) HUGO BOSS CRM strategy and guidelines
CRM activities
IT and system upgrades improve retail performance management
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Retail operations almost entirely on SAP■
Implementation of global retail merchandiseplanning solution under way
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In-store systems provide basis for systematic performance measurementEnhanced logistics infrastructure caters to growing retail business
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Flat-packed goods distribution center Europe Filderstadt, Germany New construction
Start of operation: 2014
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Regional distribution centers Asia Shanghai and Hong Kong Relocation and consolidation
Operational since 2011
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Distribution center MexicoMexico City, Mexico
Target to open 50 new stores per annum
TOTAL: 791
EUROPE*: 428
ASIA/PACIFIC: 221
Expansion of mono-brand distribution elevates brand experience
Flagships in mega-cities
Directly operated
stores Controlled space
E-Commerce M-Commerce
One face to the customer across all points-of-sale
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Push the customerexperience to the next level of retail innovation
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Ideal platform toshowcase all HUGO BOSS brands under one roof
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Capturing full brandpotential through expansion into ‘white spaces’ globally
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Renovations and extensions■
Expansion of mono-branded shop-in-shops at key accounts globally■
Either managed by retail partners or HUGO BOSS (concession model)■
Continued rollout in high potential markets■
Constant evolution of brand experienceHigh-visibility flagship store openings planned in 2013
BOSS Store Shanghai, Kerry Center
BOSS Store Tokyo, BOSS Store Shanghai,
BOSS Store Amsterdam, Leidsestraat
BOSS Store Berlin, Kurfürstendamm
Wholesale remains an important distribution channel
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40+ year business relationships■
Reliable sell-through performance■
Grown retail competence■
Industry-leading delivery and service levelsHUGO BOSS is best positioned for further growth…
…despite structural headwinds
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Limited space expansion■
Mono-brand nature of fast growing emerging markets■
Ongoing consolidation■
Franchise takeovers+7%
Average net sales per wholesale POS 45% // Retail
53% // Wholesale 2% // Royalties
38% // Multibrand
15% // Franchise Sales by distribution channel 2011
Significant growth opportunities in all three regions Europe* Royalties Americas Sales by region 2005 3% 71% 18% 8% 2010 3% 62% 22% 13% 2011 2% 61% 22% 15% 2015e 2% 54% 23% 21%
…
Asia/PacificAgenda
American strategy update
Financial strategy update Group medium-term strategy
Favorable brand perception across the region
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Modern■
Well-tailored■
Easy to fit■
ConsistentUSA CANADA MEXICO BRAZIL
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Seen as a premiumto entry luxury
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High awareness ofindividual brand lines
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BOSS Black andHUGO are the major brands
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Prestigious■
Good price-value■
Easy to fit■
Consistent■
Luxurious■
Classic■
Elegant■
Quality■
Modern■
Classic■
Sophisticated■
Masculine■
Seen as an entryinto the luxury world
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Good brandpositioning in clothing, jeans, jersey and shirts
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Recognized as afashion brand for perfect fitted suits
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A top of mind in fragrancesHUGO BOSS has clear competitive advantages in the Americas
Style
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HUGO BOSS leads the modern, wear-to-work market for menand women
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HUGO BOSS has great name recognition in all regional marketsQuality
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HUGO BOSS is recognized as providing consistency in fit and qualityEuropean lifestyle brand value in the Americas
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HUGO BOSS is seen as having a strong price/value relationshipBroad portfolio of unique brands
U.S.A. Canada Brazil Mexico
Americas* BOSS BOSS Selection BOSS Orange BOSS Green HUGO
Differentiated brands allow us to speak to different customer segments
*All splits based on full year 2012 sales estimates
76% // BOSS
2% // BOSS Selection 8% // BOSS Orange 7% // BOSS Green 7% // HUGO
Attractive growth opportunities across several categories
HUGO menswear clothing
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Introduction of suit separates in Fall ‘12 with positive early responseBOSS womenswear clothing
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Direct involvement with designers in the U.S. to increase regionally relevant contentBOSS men’s shoes
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Development of strong good/better/best strategy with $295 Italian made shoes for Fall ‘13BOSS replenishment programs
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Relaunch of sportswear basics and bodywearContinued store expansion in the Americas
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Total number of own retail stores in the Americas amounts to 142 stores at the end of September 2012■
Around 15 store openings across the region projected for 2013■
Number of stores in Brazil to double between 2011 and 201333 35 22 43 142 64 108 53 Outlets Stores Shop-in-shops
Number of own retail POS // Americas
8 44 19 71 Brazil Mexico Canada USA
Own retail POS in the Americas by country (as of Sep. 30, 2012)
HUGO BOSS wins market share at wholesale
Q1 2012 Q2 2012 Q3 2012
Wholesale sales YTD Sep. ’12** Reported comp store sales growth*
+3.5% +4.8% +4.7% +3.3% +9.3% +4.9% +11.2% +4.4% +3.0% +3.7% +5.0% +3.0% +5.0% +14%
* Figures exclude online sales segment whenever available ** Total U.S. wholesale sales
Controlled retail space upgrades brand presentation
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Aggressive development over past two years■
BOSS collection launched in 18 NeimanMarcus doors
Shop-in-shop expansion Number of U.S. shop-in-shops
37 2 2013e ~70 2012e ~45 2011 2010
Transition to concession business model
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Increased sales at retail through:■
Dominant assortments■
Controlled merchandising■
Dedicated sales associatesAgenda
American strategy update
Financial strategy update Group medium-term strategy
Continued focus on profitable growth
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Space expansion and comp store sales growth■
Growth across all regions■
Above-average increases in underpenetratedcategories
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Distribution channel mix to benefit gross margin■
Comp store sales growth to leverageretail cost base
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Marketing expenditures between 6%and 7% of Group sales
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Below-average growth of all otheroperating expenses +10% 2,059 3,000 2011 … 2015e CAGR +12.5% 469 750 CAGR 2011 … 2015e Sales
(in EUR million)
EBITDA
Working capital management key focus to maximize free cash flow
Average trade net working capital as a percentage of sales at year-end
(in %) 19.9 2011 2010 19.2 2009 24.6 2008 29.2 2007 28.2
Dividend strategy confirmed 0 10 20 30 40 50 60 70 80 90 2.50 2.00 1.50 1.00 0.50 0.00 2011 2.88 70% 2010 2.02 75% 2009 0.96 64% 2008 1.37 85% 3.00 1.45 65% 2006 1.19 64% 2005 1.00 65% 2004 0.84 67% 2003 0.78 67% 2002 0.75 71% 2007 Dividend* and payout ratio**
Dividend policy stipulates distribution of 60% to 80% of consolidated net profit
Payout ratio Dividend
Strong cash flow generation to support further debt reduction
Free cash flow
(in EUR million)
Net debt
(in EUR million)
149 201 379 583 174 2011 2010 2009 2008 2007 193 246 300 48 33 2011 2010 2009 2008 2007
Agenda
American strategy update
Financial strategy update Group medium-term strategy
2012 guidance confirmed
Growth of EBITDA before special items 10% to 12%
2012 Outlook
Sales growth (currency-adjusted) Up to 10%
Capex Above prior year level
Own retail network Around 80 net organic openings
HUGO BOSS on track for achievement of short- and medium-term targets
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Transformation from wholesale-minded toconsumer-focused company well under way
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All four strategy pillars contribute to growth■
Strong performance in the Americas■
Further progress towards achievement5-Year Overview in EUR million 2011 2010 2009 2008 2007 Earnings Position Sales 2,058.8 1,729.4 1,561.9 1,686.1 1,632.0 Gross Profit 1,264.8 1,027.2 847.1 891.0 845.0 EBITDA 467.5 336.1 224.5 236.0 287.1 EBITDA before special items 469.0 349.8 267.2 272.4 274.7 EBIT 394.1 263.9 155.4 175.0 219.7 Net income attributable to equity holders of the parent company 284.5 185.9 104.0 112.1 154.2
Financial Position and Dividend
Free cash flow 193.3 246.3 299.5 48.1 33.0 Net debt 149.1 201.1 379.1 583.2 173.6 Capital expenditures 108.5 55.6 48.3 118.8 84.7 Depreciation/amortization 73.4 72.2 69.1 61.0 67.4 Dividend 199,1 139.7 66.6 94.9 100.4
Special dividend - - - - 345.1
Asset and Liability Structure
Total assets 1,449.0 1,355.4 1,065.4 1,161.6 1,039.3 Shareholders' equity 523.2 361.2 205.5 202.9 550.7 Trade net working capital 407.4 204.8 223.0 391.9 397.4 Non-current assets 524.9 467.2 435.0 463.0 400.5
Key Figures
Gross profit margin in % 61.4 59.4 54.2 52.8 51.8 Adjusted EBITDA margin in %* 22.8 20.2 17.1 16.2 16.8 EBIT margin in % 19.1 15.3 10.0 10.4 13.5 Total leverage* * 0.3 0.6 1.4 2.1 0.6 Equity ratio in % 36.1 26.6 19.3 17.5 53.0
* EBITDA before special items/Sales
Sales
(in EUR million)
Gross margin
(in %)
EBITDA before special items
(in EUR million)
Net debt
(in EUR million)
Nine months results at a glance
+11% 9M 2012 1,739 9M 2011 1,560 +1.2pp 9M 2012 61.1% 9M 2011 59.9% 250 247 +1% 392 372 +5%
Profit & loss statement
* Basic and diluted shares
in EUR million Q3 2012 Q3 2011 Change in %
Jan.-Sep. 2012 Jan.-Sep. 2011 Change in % Net sales 646.3 615.0 5 1,738.5 1,559.6 11 Cost of sales (245.0) (241.1) (2) (642.8) (596.4) (8) Direct selling expenses (12.6) (12.0) (5) (34.0) (29.0) (17) Gross profit 388.7 361.9 7 1,061.7 934.2 14
in % of sales 60.1 58.8 1.3 pp 61.1 59.9 1.2 pp
Selling and distribution expenses (193.2) (159.1) (21) (573.3) (473.2) (21) Administration costs and other operating income and expenses (52.7) (43.1) (22) (156.8) (139.6) (12) Operating result (EBIT) 142.8 159.7 (11) 331.6 321.4 3
in % of sales 22.1 26.0 (3.9 pp) 19.1 20.6 (1.5 pp)
Net interest income/expense (4.2) (4.1) (2) (11.6) (11.8) 2 Other financial items (2.6) 2.0 <(100) (3.4) 1.2 <(100) Financial result (6.8) (2.1) <(100) (15.0) (10.6) (42) Earnings before taxes 136.0 157.6 (14) 316.6 310.8 2 Income taxes (32.6) (37.9) 14 (76.0) (74.6) (2) Net income 103.4 119.7 (14) 240.6 236.2 2 Attributable to:
Equity holders of the parent company 103.6 118.0 (12) 237.7 231.1 3 Minority interests (0.2) 1.7 <(100) 2.9 5.1 (43) Net income 103.4 119.7 (14) 240.6 236.2 2 Earnings per share (EUR)*
Ordinary share 1.50 1.71 (12) 3.44 3.34 3 Preferred share** 1.71 3.35
EBITDA before special items 165.4 177.1 (7) 391.7 372.1 5 in % of sales 25.6 28.8 (3.2 pp) 22.5 23.9 (1.4 pp)
Sales by distribution channel 17 11 25 2 7 17 19 -1 -5 0 5 10 15 20 25 30 Group Royalties Retail Wholesale fx adjusted in euro Sales growth by channel, y-o-y
9M 2012 (in %) 5 16 23 -5 0 16 15 -9 -10 -5 0 5 10 15 20 25 Group Royalties Retail Wholesale fx adjusted in euro Sales growth by channel, y-o-y
Q3 2012 (in %)
Sales by region 11 16 22 7 7 5 13 6 0 5 10 15 20 25 Group Asia/Pacific Americas Europe* fx adjusted in euro Sales growth by region, y-o-y
9M 2012 (in %) 13 5 13 25 -3 0 0 -4 -5 0 5 10 15 20 25 30 Group Asia/Pacific Americas Europe* fx adjusted in euro Sales growth by region, y-o-y
Q3 2012 (in %)
Trade net working capital 0 5 10 15 20 25 30 Q4 2011 19.9 Q3 2011 19.6 Q2 2011 19.3 Q1 2011 19.1 Q4 2010 19.2 Q3 2010 19.9 Q2 2010 20.9 Q1 2010 Q3 2009 27.2 Q2 2009 28.5 Q1 2009 29.7 22.7 +1.4pp Q3 2012 21.0 Q2 2012 20.8 Q1 2012 20.2 24.6 Q4 2009
Average trade net working capital as a percentage of sales by quarter
Retail Network
Number of own retail stores: 791
622 Sep. 30, 2012 Closings Asia/Pacific Americas Europe* Dec. 31, 2011 +122 +22 +40 -15 + 48 Spain + 25 France + 23 Switzerland + 7 Belgium + 4 Italy + 3 Germany + 3 Poland + 2 Austria + 2 Netherlands + 2 Portugal + 1 Luxemburg + 1 Sweden + 1 UK + 11 Canada + 6 USA + 4 Mexico + 1 Brazil + 24 China + 11 Taiwan + 4 Japan + 1 Australia
Level I ADR program to launched in January 2013
ADR Details Benefits of ADRs for
U.S. investors
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Clear and settle according to normal U.S. standards■
Offer the convenience of stock quotes anddividend payments in U.S. dollars
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Can be purchased/sold in the same way asother U.S. stocks via a U.S. broker
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Provide a cost-effective means ofinternational portfolio diversification
Market OTC
Symbol BOSSY
CUSIP 444560106
Ratio 5 : 1
Country Germany
Effective Date Jan 18, 2013
Underlying SEDOL B88MHC4
Underlying ISIN DE000A1PHFF7
Depositary BNY Mellon
Hong Kong Joe Oakenfold New York Ravi Davis London Mark Lewis
Financial calendar 2013
Date
Event
March 14, 2013 Press and Analysts’ Conference
May 2, 2013 First Quarter Results 2013
Forward looking statements contain risks
This document contains forward-looking statements that reflect management's current views with respect to future events. The words "anticipate ", "assume ", "believe", "estimate", "expect",
"intend", "may", "plan", "project", "should", and similar expressions identify forward-looking
statements. Such statements are subject to risks and uncertainties. If any of these or other risks and uncertainties occur, or if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made.